BLACK REPRESENTATION IN HOSPITALITY INDUSTRY LEADERSHIP
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Our mission is to see women in more than one in three positions at all levels of hospitality industry leadership and ownership. 2 | Black representation in hospitality industry leadership
May 10, 2021 Castell Project’s second annual report benchmarking Black repre- sentation in hospitality industry leadership reflects a business that is deeply reliant on Black employees. It also reflects an industry that has not yet opened as much growth opportunity to Black workers as it has for other populations. Bureau of Labor Statistics reports indicate that Black employees in the hospitality industry have disproportionately lost jobs during the COVID-19 pandemic. Statistics also show disproportionately low Black representation in hospitality industry leadership. This has been a year when US companies have stepped up their commitment to Black workers. As the hospitality industry hires post-pandemic, its ability to attract employees will be affected by its ability to deliver equity and inclusion. According to McKinsey & Company, “for diverse companies, the likelihood of outperforming industry peers on profitability has increased over time, the penalties are getting steeper for those lacking diversity.” 3 This is a potentially expensive weakness for industry profitability. Further, it suggests a competitive advantage for hospitality companies that treat Black employees equitably and provide equitable opportunity for advancement. For diverse companies, the likelihood of outperforming Purpose of Castell Project industry peers on profitability Castell Project, Inc., a 501c3 non-profit, implements initiatives that has increased over time, the enable companies and their diverse employees to fully benefit from workforce participation. Castell Project initiatives include: penalties are getting steeper • Tracking performance on hospitality industry diversity with for those lacking diversity. 3 benchmark statistics, including this report • Providing leadership training to accelerate women on the corporate ladder; Castell BUILD and Castell ELEVATE pro- grams will be offered in 2021 with scholarships available for Black women • Presenting the WSH List and Castell Award to enhance wo- men’s image through their presence on the podium, both for their own careers and to inspire others • Hosting Castell@College panels showing college students, both women and men, the richness of careers in hospitality for people of all genders and races • Launching Fortuna’s Table to bring women and under-repre- sented minorities into hotel ownership; in this entrepreneurial industry, ownership is a major route to leadership • Contact and more information may be found at CastellProject.org. We would be delighted to work with you and your company. Board of Directors, Castell Project, Inc. castellproject.org | 3
Statement from the Castell Project Board How we bring people back to We produce this statistical report to add clarity to discussions work, and who we bring back, about Black representation in the hospitality industry. Discrimi- nation and bias are real and can only be addressed when they will define the industry for are recognized and enumerated. years to come. This is a unique This is a pivotal moment. Because of the scale of business opportunity to re-shape the disruption during the pandemic, essentially every company in industry for a diverse future the hospitality industry is undergoing a corporate restructuring marketplace. at the same time. How we bring people back to work, and who we bring back, will define the industry for years to come. This is a unique opportunity to re-shape the industry for a diverse future marketplace. When we produced the first Black Representation in the Hospi- tality Industry report in 2020, we evaluated the Castell Project and decided to deliberately advance diversity in this organiza- tion. Now, we are meeting measurable commitments for the organization and each of its initiatives. We are committed to programs that catalyze Black as well as female representation in hospitality industry leadership. Executive Summary We produced the first Black Representation in the Hospitality Industry as the nation grappled with civil unrest around the treatment of Black people. The data in that report immediately preceded the COVID-19 shutdown. This second annual report is a snapshot one year later, as the COVID-19 pandemic winds down. In spite of industry statements of support, Black employ- ees lost share of hospitality industry employment and remained under-represented in leadership over the past year. • Black representation in leadership for the public face of the hospitality industry fell from year-end 2019 to year-end 2020. At year-end 2020, only 11 percent of the 801 hotel company websites reviewed for this study showed Black executives (director through CEO) compared to 16 percent of 630 company websites in 2019. • Black executives represented 1.6 percent of hospitality industry executives at the director through CEO level on company websites in 2020. This is 10.9 times lower than their 17.5 percent share of hospitality industry employment. This indicates that advancement is not equitable for Black employees in the hospitality industry. • One in 5.7 industry employees1 is Black compared to one of 49 vice presidents and one of 58 EVP/SVPs shown on hospi- tality company websites at year end 2020. • There were 5.7 white to each Black employee in year-end 2020. Black employees lost share from 2019 when there were 5.3 white to each Black employee. 4 | Black representation in hospitality industry leadership
• The hospitality industry employs Black workers at 44.6 per- cent above their 12.1 percent pro rata share of the employed US civilian labor force.1 This does not carry through to lea- dership; at the director to CEO levels 1.6 percent are Black. • Average employment in Traveler Accommodation fell 35 percent (by 479,000 people) from 2019 to 2020, according to the US Bureau of Labor Statistics (BLS).1 The hospitality industry let go a higher proportion of its Black workforce than other employees. Black employees comprised 17.5 percent of traveler accommodation employees in 2020, down from 18.8 percent in 2019. The hospitality industry also let go a higher proportion of Black employees than the overall average for US businesses. In 2020, 12.1 percent of all people employed were Black, down only slightly from 12.3 percent in 2019. • Korn Ferry reports that Black leaders hold five percent of executive positions across all industries and four percent at S&P 500 companies. This compares to the hospitality indus- try at 1.6 percent.2 • HR is the field where Black leaders have found opportunity in the hospitality industry and 32 percent of Black hospitality industry executives are in HR. • Intersectionality, the combined impact of race and gender, is more pronounced for Black women at each higher level. Although the hospitality Work at the property level was dramatically reduced by the re- industry is more reliant on duction in travel and by hotel closures. While many companies re- Black employees than many structured at the corporate level, the pandemic created additional other industries, it has less work in areas including asset management, finance, accounting, Black representation in the legal, human resources, etc. Statistics in this report reflect employ- ment in corporate offices rather than at the property level. executive ranks. castellproject.org | 5
Insight from Thought Leaders We provide these insights from several Black thought leaders as change moves through the industry. Tracy Prigmore Andy Ingraham Managing Partner, TLTso- President Founder & CEO, lutions; Founder, She Has NABHOOD a Deal; Co-Chair Fortuna’s Jonathan Tisch, Chairman & Table; Board Director Castell CEO of Loews once asked me, Project, Inc. “why are so many people of color leaving the With racial justice finally being a priority in this industry?” I replied that the reason was access to country, the hotel industry should be ultra-fo- promotion. Every study shows that our industry cused on growing the number of Black-owned lacks diversity and upward mobility, specifically hotels, management companies, and supplier for people of color. Let’s all make a great indus- businesses. When the ownership and investment try better and demonstrate that “Black Lives side of the business is more diverse, the number Matter.” Diversity and inclusion can no longer of Blacks in leadership positions will grow, and just be buzz words but must be woven into the the industry will become fabric of post COVID-19 pandemic rebuilding. more inclusive, which diversity in Will the hospitality industry change and open should drive continuous ownership will uplift its boardrooms and C-suites to minorities and innovation. communities and people of color or is it a build economic moment that will be forgot- Let’s all make a Furthermore, diversity vitality, helping ten? We all have a respon- great industry in ownership will uplift to close the racial sibility to do our part but better and communities and build wealth gap. top leaders must make the demonstrate economic vitality, help- commitment because they that “Black ing to close the racial wealth gap. set the standard. Lives Matter.” Greg DeShields Executive Director, PHL We must Diversity of the Philadelphia address the Convention & Visitors Bureau; barriers and Executive Director, Tourism Diversity Matters challenges to access. Group hotel selection is increasingly sensitive to the diversity of lodging owners and leaders. Properties that deliver diversity while re-building post-pandemic will be better posi- tioned in the group sector. As the hotel industry recovers, a substantial focus to advance diversity throughout industry leadership must be a priority. We must address the barriers and challenges to access. Tourism Diversity Matters (TDM) strives to be the collaborative leader for Diversity, Equity, and Inclusion (DE&I) initiatives that address the blind spots of ethnic disparities and provide decision-makers access, resources and tactics to develop more effec- tive DE&I strategies that engage and retain a diverse workforce. 6 | Black representation in hospitality industry leadership
Tyronne Stoudemire Vice President Global Equi- ty Diversity & Inclusion, Hyatt Hotels Corporation Equitable advancement requires leadership Donte Johnson from corporate and delivery from general man- agers. Over the past several years we have pri- General Manager, Hotel oritized diversity, equity and inclusion programs Revival to enable us to care for people so they can be Our leadership team at Hotel Revival looks their best. At the corporate level, our Global demographically similar to our community. We Diversity, Equity, and Inclusion Council and Di- simply do not place a premium on character- versity Business Resource Groups have helped istics or traits that don’t have a true impact on create environments across the globe where someone’s ability to perform a job. Engaging all colleagues can be their authentic selves with any community primarily on the basis of at work. At the property level, Hyatt general attracting talent or business is being the friend managers, Donte Johnson that calls when they need a favor. We set out We prioritize and Tracey Pool, pro- to genuinely pour our energy into the whole diversity, equity and vide insight into building community - the creatives, the businesses, the inclusion programs diverse leadership for the thought leaders, the storytellers. The com- to enable us to care post-pandemic industry. munity has more to for people so they offer than labor and The community has can be their best. customers. Honoring more to offer than that has been our labor and customers. approach. Honoring that has been our approach. Tracey Pool General Manager, Hyatt Regency Baltimore A best practice I use (and recommend) to remove obstacles is connecting and building relationships. Not one of us has And when I say “connecting,” I don’t mean on a advanced without surface level. I’m not talking about handshakes or the support of rubbing elbows, I’m talking about building actual others. relationships. I used to believe that if I simply worked really hard, my work would somehow be recognized and I would be catapulted to levels beyond where I was. I now know that ad- vancement doesn’t necessarily work that way for everyone. “It’s all about who you know” has such a negative connotation, but the truth is this: not one of us has advanced without the support of others. Please connect with others who may not look like you, whether you are a sponsor or the person being sponsored. castellproject.org | 7
Share of Black Leaders by Gender As shown in the following graphs, representation of Black leaders is extremely low in the hospitality industry, falling from 2.6 percent at the director level to 0.9 percent at the CEO/ President level. These statistics refer to mid-management directors working in corporate offices, not members of the board of directors. Black Men & Women Percent of Hospitality Company Leadership 3.0% 2.6% 2.5% 2.0% 2.0% 1.7% 1.6% 1.9% 0.8% 1.5% 0.7% 1.1% 0.9% 0.9% 1.0% 0.7% 0.7% 0.1% 1.2% 1.0% 0.6% 0.5% 0.7% 0.8% 0.8% 0.2% 0.4% 0.0% Director VP EVP/SVP Principal/ Chief CEO / Sample Managing President Overall Director Black Men 2020 Black Women 2020 Total Black % 2020 Source: The Castell Project Black Representation as a Percent of Hospitality Company Leadership by Title 3.0% 2.8% 2.6% 2.5% 2.0% 2.0% 1.8% 1.7% 1.6% 1.6% 1.4% 1.5% 1.1% 0.9% 0.9% 1.0% 0.7% 0.7% 0.7% 0.5% 0% Director VP EVP/SVP Principal/ Chief CEO / Sample Managing President Overall Director 2019 2020 Source: The Castell Project Black men and Black women made marginal gains in share in most of these positions from year-end 2019 to year-end 2020. 8 | Black representation in hospitality industry leadership
Black Women Percent of Hospitality Company Leadership 2.0% 1.9% 1.8% 1.8% 1.6% 1.4% 1.2% 1.0% 0.9% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.6% 0.6% 0.5% 0.5% 0.4% 0.2% 0.1% 0.1% 0% Director VP EVP/SVP Principal/ Chief CEO / Sample Managing President Overall Director Black Women 2019 Black Women 2020 Source: The Castell Project Black Men Percent of Hospitality Company Leadership 2.0% 1.8% 1.6% 1.4% 1.2% 1.2% 1.1% 1.0% 1.0% 1.0% 1.0% 0.7% 0.8% 0.8% 0.8% 0.8% 0.6% 0.6% 0.4% 0.4% 0.3% 0.2% 0.2% 0.0% 0% Director VP EVP/SVP Principal/ Chief CEO / Sample Managing President Overall Director Black Men 2019 Black Men 2020 Source: The Castell Project castellproject.org | 9
Share of Black Leaders by Field Black representation in leadership is heavily weighted toward human resources. HR employs over 30 percent of Black em- ployees at the director to CEO levels. This table shows how Black leaders are distributed by field. Distribution of Black Executives by Field (Director to CEO) 0.35% 30% 32% 0.3% 0.25% 19% 0.2% 15% 15% 0.15% 14% 14% 12% 8% 0.1% 7% 6% 6% 6% 5% 5% 5% 0.05% 0% HR Accounting Operations Sales Technology/ Revenue Asset Other Finance Marketing Information Management Management 2019 2020 Source: The Castell Project This table shows the share of each field held by Black people. Nine percent of HR executives are Black, which is substantially closer to pro rata representation at the director to CEO level than any other field in hospitality. The US population is 13.4 percent Black. Women, including Black women, hold the great majority of HR roles. Sales/marketing also has a few Black wom- en. Black men are more likely to find opportunity in operations and accounting/finance. Share of Black Executives by Field 0.1% 0.09% 9% 0.08% 8% 0.07% 0.06% 0.05% 4% 4% 0.04% 3% 3% 0.03% 2% 2% 2% 2% 0.02% 1% 1% 1% 1% 0.01% 0% HR Accounting Operations Sales Technology/ Revenue Asset Finance Marketing Information Management Management 2019 2020 Source: The Castell Project 10 | Black representation in hospitality industry leadership
Odds of Reaching Leadership Without bias or disadvantage, Black employees could be expect- ed to be represented in leadership at a rate proportionate to their share of the hospitality labor force. The following charts compare representation of Black executives to their proportionate share of one Black to 5.7 other traveler accommodation employees (17.5 percent)1. The bars show the number of other executives to each Black executive, ranging from 38 to 109 depending on level. Black representation diminishes at higher levels. The odds improved for Black executives over the past year. However, this is partly because the sample includes more companies and the number of Black leaders in these roles is so small that a shift of one to three can drive the changes reflected in this chart. Other Executives for Each Black Executive Compared to Pro Rata Share 160 140 136 120 115 109 100 88 80 68 62 58 60 60 54 49 40 35 38 20 5.7 5.7 5.7 5.7 5.7 5.7 0 Director VP EVP/SVP Chief CEO/ Sample President Overall Other Executives for Each Black Executive 2019 Pro Rata 2020 Other Executives for Each Black Executive 2020 Source: The Castell Project Analyzing the odds by gender shows 94 other men for each Black man at these levels. Because all women are poorly represented at these levels, there are 30 other women for each Black woman. Other Women for Each Black Woman Compared to Pro Rata Share 60 58 54 45 47 45 40 42 33 33 33 30 30 25 24 15 5.7 5.7 5.7 5.7 5.7 5.7 0 Director VP EVP/SVP Chief CEO/ Sample President Overall Other Women for Each Black Woman 2019 Pro Rata 2020 Other Women for Each Black Woman 2020 Source: The Castell Project castellproject.org | 11
Other Men for Each Black Man Compared to Pro Rata Share 250 238 200 185 153 150 116 100 79 94 94 75 75 53 60 55 50 5.7 5.7 5.7 5.7 5.7 5.7 0 Director VP EVP/SVP Chief CEO/ Sample President Overall Other Men for Each Black Man 2019 Pro Rata 2020 Other Men for Each Black Man 2020 Source: The Castell Project Black Representation by Title and Gender These charts show the distribution of jobs between Black men, At each higher level, Black women, other men and other women. Charts are pre- with its correspondingly sented for the director, VP and EVP/SVP levels. At the staff higher compensation, level, women outnumber men in the hospitality industry. By the director level, women are less well-represented than men. Black representation diminishes. representation is weak and Black men are even less represented than Black women. At each higher level, with its correspondingly higher compensation, representation diminishes. Black women in particular lose ground both as a share of all vice presidents and relative to Black men. This intersectionality, the combined impact of race and gender, is more pronounced for Black women at each higher level. Directors by Race and Gender 60.0% 52.1% 52.7% 50.0% 45.1% 44.7% 40.0% 30.0% 20.0% 10.0% 1.0% 1.8% 1.9% 0.7% 0.0% Other Men Black Men Other Women Black Women 2019 2020 Source: The Castell Project 12 | Black representation in hospitality industry leadership
Vice Presidents by Race and Gender 70.0% 60.0% 66.1% 65.7% 50.0% 40.0% 32.1% 32.3% 30.0% 20.0% 10.0% 1.1% 1.2% 0.7% 0.8% 0.0% Other Men Black Men Other Women Black Women 2019 2020 Source: The Castell Project EVP/SVPs by Race and Gender 80.0% 76.1% 75.7% 60.0% 40.0% 22.4% 22.6% 20.0% 1.0% 1.0% 0.5% 0.7% 0.0% Other Men Black Men Other Women Black Women 2019 2020 Source: The Castell Project Operating Environment Statistics summarizing the overall operating environment for Black employees in the hospitality industry are shown in the following table. Operating Environment for Black Leaders and Employees 2019 2020 Change Traveler Accommodation Employees: Percent Black 18.8% 17.5% -6.9% Traveler Accommodation: Number of White for Each Black Employee 5.3 5.7 7.4% Total US Employed: Percent Black 12.3% 12.1% -1.6% Hospitality Industry Director to CEO Level: Percent Black 1.6% 1.6% Korn Ferry S&P 500 Executives: Percent Black 5% Black Share of US Population: US Census 13.4% 13.4% Sources: US Bureau of Labor Statistics, US Census, Korn Ferry, Castell Project castellproject.org | 13
Methodology and Sample Black hospitality industry Methodology: These statistics show the public face of hospi- employees lost jobs at a higher tality industry leadership. Two analysts captured information rate than industry employees from the websites of hotel companies listed in the STR Direc- tory of Hotel & Lodging Companies. Each entry was reviewed of other races during the twice, once in the company website and then compared to the COVID-19 pandemic. LinkedIn profile. Identification was made by visual inspection and self-identification could vary. Titles: Definitions for groups of titles used for this analysis follow. Sample: This report presents statistics about a large sample of hospitality industry executives that their companies show on their corporate websites. Data includes hotel companies based in the US and Canada listed in the STR Directory of Hotel & Lodging Companies. The sample has a minimum of 5 hotels or 700 rooms. The dataset includes 7,243 people in 801 companies for 2020 and 6,692 people in 630 companies for 2019. Statistics shown reflect employees from the level of director through CEO. Validity: This study only reflects the public face of the hospital- ity industry as reflected on hotel company websites. There are executives who are not shown on these websites. We also note that only a few top executives are listed for very large hotel companies that have robust diversity initiatives. We believe statistics for these companies are under-represented. Virtually all companies show a CEO and/or president and the statistics are highly representative at these levels. At lower lev- els, sample size is substantial, but is less complete and there- fore less representative. For the same reason, CEO / Presidents are over-represented in the overall averages in this report by the nature of positions shown on corporate websites. 14 | Black representation in hospitality industry leadership
Summary Table Other Black Other Men Black Men Men Women Sample Women Women Director 2019 52.1% 1.0% 45.1% 1.8% 53.1% 46.9% 1327 2020 52.7% 0.7% 44.7% 1.9% 53.4% 46.6% 1285 VP 2019 66.1% 1.1% 32.1% 0.7% 67.2% 32.8% 1267 2020 65.7% 1.2% 32.3% 0.8% 66.9% 33.1% 1247 EVP/SVP 2019 76.1% 1.0% 22.4% 0.5% 77.1% 22.9% 624 2020 75.7% 1.0% 22.6% 0.7% 76.7% 23.3% 592 Chief 2019 76.8% 0.3% 22.4% 0.5% 77.1% 22.9% 930 2020 75.5% 0.4% 23.4% 0.7% 75.9% 24.1% 980 CEO/President 2019 92.7% 0.6% 6.6% 0.1% 93.3% 6.7% 823 2020 92.5% 0.8% 6.6% 0.1% 93.3% 6.7% 879 Source: The Castell Project, Inc. castellproject.org | 15
16 | Black representation in hospitality industry leadership
Levels: Definitions References Titles are organized by level and grouped in this report as follows: 1. Civilian Labor Force Statistics Director Principal/Partner from the US Bureau of Labor People with the title of direc- Principal, partner, member, Statistics, Current Population tor, corporate director, senior shareholder. Survey 2019, https:// director, etc. in all fields. www.bls.gov/cps/cpsaat11. However, hotel level direc- Managing Director htm tors (director of sales, etc.) Managing directors, man- 2. Korn Ferry, Why African Ame- and area directors (regional aging principals and senior rican Talent is Opting Out, director of operations, for managing directors as well as 2019. example) are excluded from “head” titles. this dataset. Regional vice 3. Diversity Wins, How Inclusion presidents are classified as President Matters. McKinsey & Com- directors in this dataset. President, owner and found- pany. May 2020. er. Presidents with the addi- 4. https://ninetytozero.org/ VP tional title of CEO are listed Vice presidents in all fields. under CEO. Those who are Vice presidents who also are also chiefs are included in the C-suite chiefs are classified leadership statistics as pres- as chiefs. Those who also idents and are also included carry a partner or principal in the C-suite detail. title are classified as partner/ principal. CEO CEOs, as well as CEOs with EVP/SVP additional titles such as CEO Executive and senior vice and chairman, president or presidents in all fields. Those managing director. who also carry a “chief” C-suite title are classified as Board chiefs. Chairman and board director. We do not present board Chief (C-suite) representation in this report. Executives with “chief-of- However, our report on Di- ficer” in their title – CFO, versity of Hospitality Industry COO, CMO, CLO, etc. Gen- Public Boards 2021 is available eral counsels are classified at CastellProject.org. as CLOs. Some chiefs also are presidents or SVPs, for instance. Dual titles includ- ing chief and director, VP or EVP/SVP are categorized by their chief role. Dual titles including president or CEO are classified as president or CEO and also shown in the distribution of chiefs. castellproject.org | 17
Board of the Castell Project, Inc. Peggy Berg, Chair, Castell Project, Inc. Mary Beth Cutshall, Executive Vice President and Chief Development Officer, HVMG; Managing Partner, Amara Capital. Castell Project, Vice Chair Eve Moore, Vice President of Operations, Legacy Ventures. Castell Project Secretary Catherine Morgen, Partner, Morris, Manning & Martin. Castell Project Treasurer Chris Daly, President, Daly Gray. Castell MarComm committee chair Fern Kanter, Executive Vice President, CHM Warnick. Castell@College committee chair Kirk Kinsell, Principal, Panther Ridge Partners. Castell Partners and Funding committee chair Tracy Prigmore, Founder and Managing Partner, TLTsolutions; Founder, She Has a Deal. Fortuna’s Table committee co-chair Rachel Moosa, Managing Director and Founder, The Hospitality Gig Talene Staab, Vice President & Global Head of Tru by Hilton Staff Deborah Cox, Vice President, Castell Project, Inc. Jane Nguyen, Administrative Assistant, Castell Project, Inc. 18 | Black representation in hospitality industry leadership
As the hospitality industry hires post-pandemic, a company’s ability to attract employees will be affected by its ability to deliver equity and inclusion.
Castell Project, Inc. 1111 Rosedale Drive NE, Atlanta, GA 30306 pberg@castellproject.org 404.236.9064 www.castellproject.org @CastellProject
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